Nigeria Pension Fund Guide 2026 — RSA, PenCom & Contributions
Updated April 2026 • Nigeria Finance Guide • 8 min read
Overview
Nigeria's Contributory Pension Scheme (CPS) requires employees to contribute 8% of basic salary while employers add 10%, totaling 18%. This is managed through Retirement Savings Accounts (RSAs) with licensed Pension Fund Administrators (PFAs).
Key Details
Top performing PFAs include Stanbic IBTC Pension (historically best returns), ARM Pension (strong equity allocation), and Leadway Pensure (consistent performer). Your choice of PFA significantly impacts long-term retirement wealth.
Important Considerations
Fund types: Fund I is aggressive (more equities, for under 49), Fund II is balanced (default for most), Fund III is conservative (for those near retirement), Fund IV is for retirees. You can request transfer between PFAs or fund types through PenCom.
Additional Information
Voluntary contributions above the mandatory 8% are tax-deductible, making extra pension savings one of the most powerful tax planning tools. You can access 25% as lump sum at retirement (minimum age 50) with the remainder providing regular income.
Frequently Asked Questions
How much pension do I contribute in Nigeria?
Employees contribute 8% of basic, housing, and transport allowances. Employers add 10%, totaling 18% of qualifying earnings.
Can I change my PFA?
Yes, you can transfer your RSA to another PFA once per year through PenCom. The process takes 2-4 weeks.
What is Fund I vs Fund II?
Fund I is aggressive (higher equity allocation) for those under 49. Fund II is balanced (default for most workers). Fund III is conservative.
When can I access my pension?
At retirement (minimum age 50), resignation, or after 4 months of unemployment. You receive 25% as lump sum and the rest as regular payments.
Is voluntary pension contribution tax-free?
Yes, voluntary contributions above the mandatory 8% are tax-deductible, making it one of the best tax savings strategies in Nigeria.